Shares end 'unstoppable run' - for now

Business Reporter

The sharemarket has finished lower, weighed down by banks as investors locked in profits after an '‘almost unstoppable’' run so far this year.

The benchmark S&P/ASX200 closed at the day’s low, down 13.6 points, or 0.3 per cent, at 4907.5, while the broader All Ordinaries lost 12.8 points, or 0.3 per cent, to 4929.1.

The market got off to a positive start as miners enjoyed an increase in base metal prices, with iron ore moving up to $US153.20 per tonne, but the gains were shortlived, as soft building approval figures took away a bit of confidence.

Figures released by the Australian Bureau of Statistics showed home approvals fell by 4.4 per cent in December, while economists had expected a rise of 1 per cent.

‘‘The soft building approval numbers were a little bit of a wakeup call for investors after the market’s almost unstoppable run,’’ said JBWere executive director Mike Kendall. ‘‘It was a little bit of a sobering reminder, this isn’t a bull market yet."

Financials were a considerable weight on the market, with Westpac leading the losses among the big four banks, down 1.3 per cent to $27.94. Minor bank Suncorp fell 1.4 per cent to $10.71.

After leading much of the charge up on the ASX this year, investors may have been looking to lock in some heavy profits in bank stocks, said Mr Kendall.

Rio Tinto shares rose 1.2 per cent to $67.99, after the miner’s $3 billion Pilbara mine expansion was approved by the Western Australian government. BHP ended 0.3 per cent lower at $37.81.

Aquila Resources’ shares lost 3.9 per cent, falling as much as 9.6 per cent during the session after the company put postponed its $7.4 billion iron ore project in West Pilbara.

Linc Energy dropped 4.7 per cent to $2.05 after a report in BusinessDay continued to place doubt over the company’s claims that it could produce ultra-clean fuel for around $30 a barrel.

The Australian dollar remained relatively flat against its US counterpart at $US1.0436. Against the yen, the dollar continued its strong run, trading around its highest levels since August 2008, at 96.70 yen. But the dollar continued its struggles against the euro, fetching around 76.6 euro cents, close to its lowest point in 14 months.

Australian 10-year government bonds fell to nine-month lows, triggered by a selloff of US treasuries and an improving outlook in Europe, reaching 96.435.

Reporting season kicks off tomorrow, with Transurban and Cochlear two of the bigger companies posting half-year earnings. Both lost ground today, with Transurban falling 1.1 per cent to $6.10 and Cochlear ending 0.8 per cent lower at $80.46.

‘‘There could be a few fears that maybe the earnings aren’t quite at the lofty levels that the market has managed to push itself to over the last five or six weeks,’’ said Mr Kendall.